Smithfield Foods: Strategic Nathan’s Famous Acquisition Strengthens Packaged Meats Growth and Supports Buy Rating

UBS analyst Manav Gupta has maintained their bullish stance on SFD stock, giving a Buy rating today.

Manav Gupta has given his Buy rating due to a combination of factors centered on the strategic acquisition of Nathan’s Famous and its implications for Smithfield Foods’ core business. By converting a time-limited license into full ownership of the Nathan’s brand, Smithfield secures perpetual control over a well-established, nationally recognized franchise, removing future licensing uncertainty and preserving a key profit contributor. The deal is expected to generate incremental cost efficiencies over the next few years, enhancing margins, while the modest leverage profile (net debt to EBITDA near zero) suggests the balance sheet can comfortably absorb the transaction. Overall, integrating Nathan’s into Smithfield’s portfolio should strengthen brand equity, improve earnings visibility, and support long-term growth in Packaged Meats.

Manav Gupta’s rating is based on the view that this acquisition fits squarely within management’s articulated strategy to expand higher-value Packaged Meats. Smithfield already manufactures much of Nathan’s retail product range, so full ownership should allow better coordination of production, marketing, and distribution, as well as potential expansion of manufacturing capacity beyond the current two plants. The combination of a strong, century-old consumer brand, identified cost synergies, and strategic alignment with Smithfield’s growth priorities underpins the bullish stance on the stock. Taken together, these elements support the conclusion that the acquisition enhances Smithfield’s competitive positioning and justifies a Buy recommendation on SFD shares.

In another report released today, Morgan Stanley also maintained a Buy rating on the stock with a $29.00 price target.